Poverty & Equity Brief
Latin America & the Caribbean
Uruguay
April 2021
While Uruguay's poverty rate is the lowest in Latin America, with 3.2 percent of its population living on less than $5.5 (in 2011
PPP) in 2019, systematic differences in monetary and non-monetary dimensions of poverty by race, age group and residence
remain important. Poverty incidence is twice as high among children and the afro-descendant population than among the
overall population.
The COVID-19 pandemic hit Uruguay at a time of decelerating growth and weakened conditions for the poorest 40 percent
(B40). Between 2014-2019 the real per capita income for the overall population grew at a low rate (0.93 percent), which was
even lower for the B40 (at 0.33 percent annually). Inequality, as measured by the Gini index, remained unchanged at 39.7 in
2019.
Labor market outcomes were already frail before the onset of the pandemic with unemployment increasing from 8.3 percent in
2018 to 8.9 percent in 2019, and employment rates falling from 57.2 to 56.7 percent.
With the effects of the pandemic shock, unemployment reached a maximum of 11.2 percent in October 2020. Unemployment
among women has been increasing since the onset of the pandemic and may continue this trend if the difficult conditions in the
hospitality industry persist (unemployment reached 8.7 and 12.6 percent among men and women in December, respectively).
However, existing safety nets and increased flexibility of the unemployment insurance scheme has prevented households in the
middle of the distribution from falling into vulnerability or poverty. Welfare losses in the lower end of the distribution were
partly contained by increases in the benefit amounts of existing transfers, and a new transfer targeting informal workers not
covered by other programs.
Poverty incidence showed an incipient upward trend in 2019, with 8.8 percent of Uruguayans below the national poverty line compared with 8.1 percent in 2018 - and is estimated to have increased in 2020 by around 2 percentage points. Overall,
35,000 people are expected to have fallen under the international upper middle-income poverty line (an increase from 3.2 in
2019 to 4.2 percent in 2020).
Number of Poor
(thousand)
Rate
(%)
Period
309.6
8.8
2019
3.4
0.1
2019
15.7
0.5
2019
109.2
3.2
2019
0.1
2019
0.33
2014-2019
Gini Index
39.7
2019
Shared Prosperity Premium = Growth of the bottom 40 - Average Growth
0.33
2014-2019
Annualized GDP per capita growth
0.93
2014-2019
Annualized Income Growth per capita from Household Survey
0.00
2014-2019
-0.02
2014-2019
POVERTY
National Poverty Line
International Poverty Line
56 in Uruguayan peso (2019) or US$1.90 (2011 PPP) per day per capita
Lower Middle Income Class Poverty Line
94.3 in Uruguayan peso (2019) or US$3.20 (2011 PPP) per day per capita
Upper Middle Income Class Poverty Line
162.1 in Uruguayan peso (2019) or US$5.50 (2011 PPP) per day per capita
Multidimensional Poverty Measure
SHARED PROSPERITY
Annualized Income Growth per capita of the bottom 40 percent
INEQUALITY
GROWTH
MEDIAN INCOME
Growth of the annual median income/consumption per capita
Sources: WDI for GDP, National Statistical Offices for national poverty rates, POVCALNET as of Feburary 2021, and Global Monitoring Database for the rest.
Poverty Economist: Lourdes Rodriguez Chamussy
POVERTY HEADCOUNT RATE, 2006-2019
INEQUALITY TRENDS, 2006-2019
Gini Index
35
50.0
25
45.0
30
40.0
20
35.0
25
30.0
15
20
25.0
15
20.0
10
15.0
10
10.0
5
5
5.0
0
0.0
0
2006
2008
2010
2012
2014
International Poverty Line
Upper Middle IC Line
GDP
Poverty
rate
(%)
2016
2006
2018
Lower Middle IC Line
National Poverty Line
2008
2010
2012
2014
2016
2018
GDP per capita,
$ 2017 PPP
(Thousand)
Source: World Bank using ECH/SEDLAC/GMD
Source: World Bank using ECH/SEDLAC/GMD
KEY INDICATORS
Distribution among groups: 2019
Upper Middle Income line(%)
Relative group (%)
Multidimensional Poverty Measures: 2019
(% of population)
Non-Poor
Poor
Bottom 40
Top 60
Urban population
97
3
39
61
Monetary poverty (Income)
Rural population
96
4
50
50
Daily income less than US$1.90 per person
Males
97
3
40
60
Females
97
3
40
60
Education
0 to 14 years old
93
7
62
38
At least one school-aged child is not enrolled in school
0.7
15 to 64 years old
97
3
38
62
No adult has completed primary education
2.0
65 and older
100
0
17
83
Without education (16+)
97
N/A*
47
53
Access to basic infrastructure
Primary education (16+)
97
3
44
56
No access to limited-standard drinking water
0.5
Secondary education (16+)
98
2
41
59
No access to limited-standard sanitation
1.0
Tertiary/post-secondary education (16+)
100
0
10
90
No access to electricity
0.1
Source: World Bank using ECH/SEDLAC/GMD
0.1
Source: World Bank using ECH/SEDLAC/GMD
Notes: N/A missing value, N/A* value removed due to less than 30 observations
POVERTY DATA AND METHODOLOGY
Official poverty estimates are produced annually by the Instituto Nacional de Estadística (INE) using income as a welfare measure. The poverty lines used correspond to
the updated monetary value of the basic food and non-food baskets considering economies of scale for the non-food expenditures introduced by geographical area. The
latest official national estimate of the poverty rate in Uruguay is 8.8 percent of the population, based on income data from the 2019 edition of the Encuesta Continua de
Hogares (ECH).
The World Bank poverty estimates rely on a harmonized version of the household survey data from the ECH; the latest harmonization available corresponds to data
from 2018. All monetary measures are adjusted to USD in 2011 PPP. Thus, poverty is estimated using international poverty lines based on the "dollar a day"
methodology that allow comparability across countries and years. The harmonized microdata for Uruguay is part of the SEDLAC project (CEDLAS and World Bank).
Official microdata are available through Uruguay's national statistical office. Because of the methodological differences in the estimation process, the levels and trends
of the national and international poverty rates can differ.
HARMONIZATION
The numbers presented in the brief are based on the regional data harmonization effort known as the Socio-economic Database for Latin America and the Caribbean
(SEDLAC) - a joint effort of the World Bank and CEDLAS from the National University of La Plata (Argentina). SEDLAC includes 18 countries and more than 300 household
surveys since the 80s. Several Caribbean countries have not been included in the SEDLAC project due to lack of data. Since an income-based welfare aggregate is widely
used in the region for official poverty estimates, income-based microdata is used for the Global Monitoring Database (GMD) and Global Poverty Monitoring. SEDLAC
covers demographics, income, employment, and education. Terms of use of the data adhere to agreements with the original data producers.
Latin America & the Caribbean
Uruguay
povertydata.worldbank.org
www.worldbank.org/poverty